A fabless semiconductor company specializes in the design and
sale of hardware devices implemented on semiconductor chips.
It achieves an advantage by outsourcing the fabrication of the
devices to a specialized semiconductor manufacturer called a
semiconductor foundry or "fab". The credit for pioneering the
fabless concept is given to Bernie Vonderschmitt of Xilinx and
Gordon A. Campbell of Chips and Technologies.

What is a foundry?

In
microelectronics, a foundry refers to a factory where devices
such as integrated circuits are manufactured.

What is System-On-Chip (SOC)?

In
this approach, components traditionally manufactured as
separate chips to be wired together on a printed circuit board
are designed to occupy a single chip that contains memory,
microprocessor(s), peripheral interfaces, Input/Output logic
control, data converters, and other components, together
composing the whole electronic system.

What is Rock's Law?

Rock's Law,
named for Arthur Rock, says that the cost of a semiconductor
chip fabrication plant doubles every four years. As of 2003,
the price had already reached about 3 billion US dollars.

Rock's Law can be seen as the economic flipside to Moore's
Law; the latter is a direct consequence of the ongoing growth
of the capital-intensive semiconductor industry-innovative and
popular products mean more profits, meaning more capital
available to invest in ever higher levels of large-scale
integration, which in turn leads to creation of even more
innovative products.

The semiconductor industry has always been extremely
capital-intensive, with very low unit manufacturing costs.
Thus, the ultimate limits to growth of the industry will
constrain the maximum amount of capital that can be invested
in new products; at some point, Rock's Law will collide with
Moore's Law.

What is Moore's Law?

The growth of
complexity of integrated circuits follows a trend called
"Moore's Law", first observed by Gordon Moore of Intel.
Moore's Law in its modern interpretation states that the
number of transistors in an integrated circuit doubles every
two years. By the year 2000 the largest integrated circuits
contained hundreds of millions of transistors.

What is Very Large-Scale Integration
(VLSI)?

The final step in the development process,
starting in the 1980s and continuing on, was "Very Large-Scale
Integration" (VLSI), with hundreds of thousands of
transistors, and beyond (well past several million in the
latest stages).

What is Large-Scale Integration (LSI)?

"Large-Scale Integration" (LSI) in the mid 1970s produced tens
of thousands of transistors per chip. They were attractive
economically because while they cost little more to produce
than SSI devices, they allowed more complex systems to be
produced using smaller circuit boards, less assembly work
(because of fewer separate components), and a number of other
advantages.

Further development led to LSI circuits being produced in
large quantities for computer main memories and pocket
calculators.

What is Medium-Scale Integration (MSI)?

The next step in the development of integrated circuits, taken
in the late 1960s, introduced devices which contained hundreds
of transistors on each chip, called "Medium-Scale Integration"
(MSI).

What is Small-Scale Integration (SSI)?

The first integrated circuits contained only a few
transistors. Called "Small-Scale Integration" (SSI), they used
circuits containing transistors numbering in the tens.

What is testing?

Wafer testing or
wafer probing is the process of testing each wafer before
packaging using very expensive automated test equipment (ATE).

The wafer is then cut into small rectangles called dice. Each
good die is then connected into a package using aluminum (or
gold) wires which are welded to pads, usually found around the
edge of the die. After packaging, the devices go through final
test on the same or similar ATE used during wafer probing.
Test cost can account for over 25% of the cost of fabrication
on lower cost products, but can be negligible on low yielding,
larger, and/or higher cost devices.